Datang Power awaits final nod on 16b yuan coal-to-chemical works

Datang International Power Generation says a proposed 16.2 billion yuan coal-to-chemical project in which it has taken a 60 per cent stake has cleared all official hurdles and now awaits only the formal approval of the National Development and Reform Commission (NDRC).

'Our project has received approval papers from the Inner Mongolia autonomous region government and we have approvals from seven to eight state departments including water and environmental protection authorities,' vice-president Zhou Gang said in an interview.

However, the final go-ahead must come from the NDRC, which in July last year imposed a moratorium on approving such projects to prevent what it described as disorderly investment.

Datang, the listed unit of state-owned national power major China Datang Group last Tuesday said its board had approved investment in a 60 per cent stake in the project, capable of producing 480,000 tonnes of plastic raw material polypropylene, 180,000 tonnes of base chemical naphtha and 36,000 tonnes of liquefied petroleum gas from coal by the end of next year.

At present, the products are produced from oil and gas. While small-scale pilots have achieved technical success in producing them from coal, commercial-scale plants have not yet been built worldwide.

'It will be the largest such project in China and also internationally,' said Mr Zhou. 'We will be using the most advanced technology in the world and the NDRC has also agreed to exempt our equipment from import tariffs.'

Mr Zhou said the project had an internal rate of return of 15 per cent.